Cash-strapped state governments will be forced to pay contractors the same as their own public servants under a federal government plan to expand the Fair Work Act that is designed to embarrass the states over large job cuts.

Employment and Workplace Relations Minister
Bill Shorten
on Friday said he would introduce legislation next month that would require state public sector jobs that are outsourced to receive the same wages and conditions, a rule that will protect existing benefits.

The move is part of a political strategy by the federal government to stoke voter backlash against big job cuts by the Coalition governments of
Campbell Newman
in Queensland and
Barry O’Farrell
in NSW, which are cutting spending because of weaker tax revenue.

Mr Shorten claimed a federal Coalition government would cut 20,000 public servants. The federal government is reducing spending but hasn’t announced big job cuts.

Employer groups and the Queensland government said the changes would lock in inefficient pay structures, prevent retrenched staff from finding work and make it harder for state governments to balance their budgets.

Related Quotes

Company Profile

The NSW government said it already protected the conditions of employees in state businesses that were privatised.

Labor’s plan is designed to make it harder for the Queensland government to find savings by shifting government services to the private sector.

The new Liberal National Party government plans to sack 14,000 employees, and recently removed job security and contracting-out clauses from public sector wage agreements.

Mr Shorten said Queensland had turned its public servants into second-class workers. “This [proposed change] will not stop the outsourcing or privatisation of particular entities if the Newman government decides to do that," he said. “What it will do though is prevent Queensland public sector workers from being ambushed, from having their existing conditions torn up and being sold off at discount rates to new employers."

Queensland Attorney-General Jarrod Bleijie said the change would make it harder for retrenched public sector employees to get private sector jobs. “On the face of it, you could have two groups of employees who do the same job but are treated differently," he said.

The Queensland LNP government said last week it would shift about $500 million worth of government contracts and services from the public to the private sector as part of its attempts to return the budget to surplus in 2013-14.

NSW Treasurer
Mike Baird
said the state government already made provision for employees’ rights to be transferred to their new employer, for instance, when Sydney Ferries was fanchised.

“Today we have the federal government announcing that they are going to legislate for something that is already taking place," he said.

Mr Shorten said his proposed change would expand the Fair Work Act’s “transfer of business" rules, which already apply in Victoria, the ACT and the Northern Territory, to cover public sector workers in other states.

It would force private companies taking on retrenched hospital cleaners, canteen operators and other staff in the same role to match their public sector conditions, hindering state governments’ ability to reduce the cost of such services.

A person transferred to a new employer to do the same job, starting within three months, would retain their pay and conditions, including accrued entitlements such as long service and sick leave.

A person fired from their job after it was outsourced would receive the same payout as a government employee. The federal Coalition was awaiting further detail before commenting.

Employer groups were scathing.

“It’s unrealistic for any government to expect a private sector employer to continue the often highly restrictive and inflexible workplace arrangements that have been negotiated under state government enterprise bargaining agreements when they take over state government contracts or services," NSW Business Chamber chief executive
Stephen Cartwright
said.

Australian Council of Trade Unions president
Ged Kearney
said the change would remove the incentive for state governments to use outsourcing as a way of undermining pay and conditions.